NBC Olympic Ad Sales: Not Exactly A Gold Medal Pace

TV advertising sales of NBC Winter Olympics in Torino, Italy are somewhat slow, according to media buying executives. NBC has 75% sold of its goal of just over $800 million.

"I would think they are behind," said one veteran media agency buying executive who is close to buying a Winter Olympics package.

A slower overall TV advertising market and a big Olympic price tag for advertisers are taking their toll, according to media agency executives. In addition, advertisers are now asked to buy a lot more commercial time across all NBC Universal networks.

"It's not like in the old days when there was just NBC to buy," said Larry Novenstern, senior vp and director of national broadcast for Deutsch Inc. "They have a lot more inventory to sell on their cable networks. They are actively selling right now."

This would be a continuation of NBC's most recent advertising sales concerns: In the upfront advertising market just completed, the network dropped to $1.9 billion--about a billion dollars less sold than in the upfront market of a year ago.

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An NBC spokesman would only say that advertising sales for the Olympics are on pace--but would not disclose any specifics.

Before the upfront market started in May, media buying executives expected that NBC might try to package the Winter Olympics with its prime-time programming to prop up prime-time pricing. But buyers said that didn't happen.

"They sold nothing in the upfront [for the Olympics], which was a little bit surprising," said Tim Spengler, executive vp and director of national broadcast for Initiative Media. "They don't discount the Olympics."

NBC is offering a 15 to 16 rating guarantee for the Torino Olympics, say media buying executives. NBC Olympic prime-time programming is priced at around $675,000 a unit.

Media executives say NBC is scouring agencies for small $5 million to $8 million budgets from advertisers. NBC has already re-upped many of its incumbent advertisers, which are also International Olympic Committee sponsors--McDonald's, Coca-Cola, Visa, General Electric, Kodak, Samsung, and others--and has made TV deals in packages priced from $25 million to $50 million.

One media buyer complained that NBC packages perhaps too many cable spots into deals: "It's a small percentage of your overall dollars, but a huge percentage of your overall units--about 50%."

Sports in general has been getting strong pricing on TV--such as the NFL--say media executives. But the Winter Olympics aren't benefiting here. "It's priced at a premium, and it's not in the fourth quarter," said Initiative's Spengler. "Fourth-quarter sports are strong."

Torino's rating guarantee is just about the same that NBC offered for the 2002 Salt Lake City Olympics, which exceeded expectations by over-delivering on its ratings promise by 18% to a 19.2 average rating.

NBC pulled in about $740 million in advertising sales, and gave the network a $75 million profit. NBC spent $545 million for those rights, as well as spending millions on TV production. By contrast, NBC paid about $614 million for the rights in Torino.

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